UW Health is seeking to cut $80 million over the next 18 months to help cope with sharp cost increases and declining revenue growth, according to a statement the health system released Thursday.
UW Health needs to reduce expenses and increase revenues for a number of reasons.
Kaplan cited the “extraordinary growth” in the cost of medications and a rising number of Medicare and Medicaid patients. Those government programs pay less than it costs to provide care, and Kaplan said commercial payers are reluctant to offset those underpayments.
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UW Health CEO Alan Kaplan said the first steps will be to manage overtime and not fill open positions. Kaplan said the cuts could include eliminating at least 225 full-time positions, according to the Associated Press. UW Health has 17,000 employees.
“When positions are eliminated, UW Health will help employees move to other areas of the organization when possible,” Kaplan said. “At the same time, UW Health will continue to recruit in areas where additional staff members are needed for patient care.”
In addition to labor changes, the system will also seek savings in supply costs, pharmaceuticals and utilities.
UW Health includes UW Hospital and Clinics; Unity Health Insurance and the UW Medical Foundation, UW-Madison’s doctor group, AP reported.
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